Making Tax Digital for Landlords: Guide to MTD rules and deadlines
Learn how Making Tax Digital for landlords saves time, cuts errors, and keeps you compliant.
Published Tuesday 16 December 2025
Table of contents
Key takeaways
- Making Tax Digital for Income Tax (MTD for IT) starts in April 2026 for landlords earning over £50,000 a year from property income, or from property income and self-employment income combined.
- Work out your total income by adding together all your rental income (from buy-to-let, commercial properties, and holiday lets) plus any income from self-employment. If the total is over £50,000, you'll need to use MTD.
- You'll need to use HMRC-recognised software to keep digital records and submit quarterly updates (by 7 August, 7 November, 7 February, and 7 May) plus a Final Declaration by 31 January, replacing the annual Self Assessment tax return.
- Think about signing up for MTD early to get comfortable with the digital system before it becomes mandatory. Getting familiar with digital record keeping now will make the transition easier and help you stay on top of your finances throughout the year.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax (MTD for IT) is the government's digital tax reporting system. It replaces annual self-assessment returns with quarterly digital submissions. The aim is to help reduce the tax gap for Self Assessment, which is estimated at £5 billion.
Key requirements for landlords
- Income threshold: £50,000 or more annually from April 2026
- Digital records: Use HMRC-recognised software
- Quarterly updates: Submit income and expenses four times a year
- Final declaration: Complete by 31 January following the tax year
When MTD for Income Tax starts
- April 2026: Landlords earning £50,000 or more must comply
- April 2027: Income threshold drops to £30,000 or more
- April 2028: £20,000 or more threshold
Why prepare now: Starting early helps you get comfortable with the digital system before it becomes mandatory.
Still using Self Assessment? Here's what you need to know
If your combined income does not yet meet the threshold for MTD for Income Tax compliance, you'll still need to complete your annual Self Assessment tax return. Our comprehensive guide walks you through the current process, including deadlines, allowable expenses, and how to submit your return to HMRC. Read our guide on how to file Self Assessment for landlords.
Who does MTD for landlords apply to?
MTD applies to all landlords earning £50,000 or more annually from certain property types. If you're a sole trader with property income, your self-employment income and property income are added together – if the combined total is £50,000 or more, you'll need to use MTD.
Property types included:
- Buy-to-let properties: Residential rental properties
- Furnished Holiday Lettings (FHLs): Short-term holiday rentals
- Commercial property: Office, retail, or industrial rentals
- Non-UK property: Overseas rental income
Special situations:
- Joint ownership: You'll need to use MTD if your share of the income is over £50,000
- Multiple properties: Add up the income from all your properties
- Mixed income: Property income plus self-employment income are added together
Are there any exemptions for landlords?
There are a few exemptions to MTD for IT. For example, if you receive income from shares in a real estate investment trust (REIT), you're exempt from MTD for private landlords. If you run your property business through a limited company, you need to continue sending limited company accounts and company tax returns to HMRC and Companies House as usual.
Does selling a property count towards MTD?
No, income from selling a property doesn't count towards MTD for Income Tax – this comes under Capital Gains Tax instead. You'll need to report and pay this tax within 60 days of the sale. Learn more about Capital Gains Tax with our guide.
How to calculate your income for Making Tax Digital for landlords
Calculate your qualifying income by adding all your property and self-employment earnings together.
Income calculation includes:
- Rental income: All property earnings (buy-to-let, commercial, holiday lets)
- Sole trader income: Earnings from any business you run as a sole trader
- Combined total: Add both sources together
Example: £35,000 rental income + £20,000 freelance work = £55,000 total (MTD required from April 2026)
If you run your property business through a limited company, you should continue to submit limited company accounts and company tax returns to HMRC and Companies House as usual.
How will Making Tax Digital work for landlords?
Instead of filing a single tax return each year, the MTD process involves more regular updates. Here's how it works:
- You'll use compatible software to send a summary of your rental income and expenses to HMRC every three months. The deadlines for quarterly updates are 7 August, 7 November, 7 February, and 7 May.
- At the end of the tax year, you'll review the information from your quarterly updates, make any final adjustments, and submit a Final Declaration.
- This Final Declaration confirms your income for the year and replaces the Self Assessment tax return for your property income.
Using software designed for MTD makes this process much simpler, as it helps you track everything throughout the year and prepare your submissions automatically.
What information do landlords need to send to HMRC?
MTD requires two types of submissions to replace your annual self-assessment.
Quarterly updates (every 3 months):
- What to include: Rental income and allowable expenses
- When to submit: Within one month of the quarter ending
- How to submit: Through HMRC-compatible software
Final Declaration (annual):
- What to include: Relief claims and additional income (like savings and investments)
- When to submit: By 31 January following the tax year
- What it does: Completes your annual tax calculation
HMRC-recognised software can help you meet your tax obligations and complete each part of your submission.
If you own property jointly with someone else, you can choose to send your expenses once a year. However, you'll still need to include joint property income in your quarterly updates. For detailed guidance, refer to HMRC's resources on easements for landlords.
How to sign up for Making Tax Digital
You can sign up for MTD early if you meet these requirements.
Eligibility checklist:
- You're currently registered for self-assessment
- You're up to date with your tax returns and payments
- You have HMRC-recognised MTD software
How to sign up:
- Contact your software provider to guide you through the process
- Use your existing HMRC online account through Government Gateway
- Ask your accountant to register on your behalf
Should you sign up for MTD early?
Signing up for MTD early helps you get comfortable with the digital system before it becomes mandatory. When MTD for VAT was introduced, a report found that 69% of businesses experienced at least one benefit, including making fewer mistakes.
Benefits of signing up early:
- Practice time: Learn the software without deadline pressure
- Process refinement: Identify and fix any issues before the mandatory dates
- Confidence building: Reduce stress when compliance becomes required
Requirements for early sign-up:
- HMRC-compatible software: Using approved MTD software
- Self-assessment registration: Current tax registration active
- Clean tax record: Up to date with existing obligations
Read the HMRC guidance to learn more about signing up for MTD for Income Tax early.
How to prepare for MTD as a landlord
Get ready for MTD with these essential steps.
Software setup:
- Choose HMRC-compatible software: Select from the approved MTD software list
- Import existing data: Transfer your current records to the new system
- Test quarterly submissions: Practice before the mandatory dates
Process changes:
- Regular bookkeeping: Update your records monthly
- Quarterly deadlines: Submit updates every three months
- Professional support: Find an accountant or bookkeeper with MTD experience
Xero MTD software for landlords
Start using MTD-compatible, cloud-based software now so you're ready when the rules apply. By the time the MTD for IT deadlines come around, you'll already be confident with digital record keeping using software.
Xero software can help you with more than just MTD compliance. With features like automated bank feeds, invoicing, expense management and reports, Xero helps you keep your finances healthy all year round.
You can access plenty of resources to help you prepare for the new HMRC requirements for landlords. Explore our MTD for IT content hub.
FAQs on Making Tax Digital for landlords
Here are answers to a few common questions about MTD for landlords.
Can my accountant handle all MTD submissions for me?
Yes, your accountant or bookkeeper can manage your MTD submissions for you. You just need to authorise them to act on your behalf. Using software like Xero makes it simple to work with your advisor and give them access to your records.
What happens if I miss a quarterly submission deadline?
HMRC may issue penalties for late submissions, so it's important to stay on top of your deadlines. If you think you might be late, speak with your accountant or contact HMRC as soon as you can.
Do I need different software for different types of rental properties?
No, you can usually manage all your properties in a single piece of software. MTD-compatible software is designed to handle income and expenses from various property types, whether they're buy-to-let or furnished holiday lettings.
Do I need to register separately if I'm already registered for MTD for VAT?
Yes. VAT and income tax are two different taxes, so you'll need to sign up for MTD for IT separately. Learn more about MTD for VAT here.
Let Xero help you stay compliant with MTD
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